Lagniappe

 

 

Lidice Valenzuela: Mexico:
seventy years since oil expropriation

 

This coming March 18 marks 70 years since General Lázaro Cárdenas nationalized Mexican oil, a conquest of the ancient country of the Aztecs that, given current efforts to reverse it, in 2008 has become a call to struggle for the political opposition and the 80-plus% of the population that opposes the so-called structural reform of the state oil company, PEMEX.

The changes planned, which have been taking shape over the last 25 years of neoliberal policies, will allow private investment capital to participate in the industry, despite constitutional prohibitions to this effect.

"Any government or individual who hands over natural resources to foreign companies, is betraying the country," said President Cárdenas del Río when the country’s oil industry – which now accounts for 50% of the Gross National Product (GNP) – was expropriated.

What is the pretext that Mexican governments have used over the years to justify handing over the flagship state oil company to foreign usurers? As it is known, 1,200 Mexican companies have been privatized in the last 20 years, a process that has accelerated since the signing of the Free Trade Agreement (FTAA) with the United States and Canada in 1994, the renegotiation of which is currently being demanded by agricultural workers as a result of the ruin it has brought to this sector and the general increase in the cost of living.

Although no administration to date has been able to convince the National Congress to reform the constitution in order to "legally" privatize PEMEX, the conditions have been created so that foreign investors can collaborate (according to a variety of sources) within the infrastructure of PEMEX. The reason is a simple one: They have allowed the years to go by without repairing a single piece of extraction equipment, much less expanding the industry, transportation or the refining of oil or gas.

PEMEX is even in debt to the tune of $107 billion, an extraordinary fact for a company that contributes more than 50% of the state’s budget, at 2007 prices.

That amount could rise to $500 billion by the end of this year, making it in excess of 50% of the GNP.

Mexican analysts estimate that during the period 2001-2007, oil income stood at around $410 billion. Of that amount, 70% went to the federal government by way of the Secretariat of the Treasury and the other 30% went to PEMEX. That is to say that there was a 182% increase in the government’s share and a 235% increase in the amount going to the state oil company during this period. Nevertheless, it would appear that the privatization is going ahead in earnest, without the necessity, according to the government, of changing the national Constitution.

This past February, Energy Secretary Georgina Kessel announced that this month the government would present a reform proposal, which includes possible PEMEX alliances with foreign companies for the exploration and drilling of oilfields along the nation’s maritime border.

According to Kessel, it is very likely that U.S. companies will be extracting crude oil in this area by 2010.

"In two years’ time, we would be losing pressure and the rate of recuperation of hydrocarbons on the Mexican side will go down with the consequent loss of wealth," explained the secretary.

Contradicting economic experts who have affirmed the need for a constitutional change to carry out such an energy reform, Kessel insisted, "It doesn’t necessarily violate the constitution, which prohibits foreign investment in crude oil and natural gas," though she did point out that changing the legal framework would clarify what PEMEX can do.

Mexican intellectual and political scientist Carlos Fazio warned that PEMEX has already established covenants of cooperation with five multinational companies: the English-Dutch Royal Dutch Shell, Petrobras from Brazil, Statoil, from Norway, the Canadian Nexen and the giant U.S. oil company Chevron-Texaco, although, according to government authorities these are "covenants of a non-commercial character."

The newspaper La Jornada, nevertheless, reported this past December the existence of an association of a confidential nature with Shell that permits the transnational to explore the Chicontepec, Veracruz oilfield, in violation of the constitution.

Faced with what appears to be privatization of the state oil company via a variety of methods in the short run, the National Movement for the Defense of Oil called on Mexicans to come together on the 70th anniversary of its nationalization in a giant protest demonstration.

Former presidential candidate Andrés Manuel López Obrador has said that the energy secretary’s proposals will have "a hose effect, since they want to suck up all the oil," and added, "If the so-called energy reform is implemented, the methods and association with foreign companies would mean Mexico handing over half of all oilfields discovered to these oil companies."

The Broad Progressive Front (FAP), whose members are legislators from the Democratic Revolution Party, The Party of Work and Convergence, as well as other social groups, have announced plans of resistance to the official proposals.

There will be a "legislative shut-down" said Porfirio Munñoz Ledo, coordinator of the FAP, meaning that debate on the project in Congress will be prevented, and: "We will maintain our fundamental attitude that oil will not be handed over to foreigners."

For its part, The Nuclear Industry Workers Union reported that brigades of workers have already been formed to inform citizens of any government pretensions and to organize street protests. In every state of the republic, committees of the National Movement in Defense of Oil are to be formed in preparation for the 70th anniversary of the expropriation.

That is to say, this is a critical year given the government’s desire to implement the long-standing neoliberal plan to take from the Mexican people one of its greatest prides, its oil, and surely, to paraphrase the noble President Cárdenas, they will not forgive traitors.

Lidice Valenzuela write regulary for Granma. Petroleumworld does not necessarily share these views.

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Petroleumworld News 03/10/08

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